High restoration costs at Lisbon’s Farwell Mill are forcing building managers to discontinue 42 subsidized apartments, instead turning them into market-rate units.

But first, they plan to construct new subsidized apartments at Winter and Beech streets for those Farwell Mill renters who will lose their apartments, as well as for other lower-income renters.

The proposed development comes as Realty Resources, the property manager of Farwell Mill and developer of the Winter Street housing development, aims to tackle building restorations at the mill costing $43 million. The cost is higher because of the property’s historical designation, according to information on a website for the proposed Winter Street development.

The 1857 woolen mill was renovated for apartments in the early 1990s. It houses a mix of subsidized and market-rate apartments.

Details on the restoration work planned by Realty Resources were not available. Development Officer Nichole Lorentzen declined an interview request last week, stating, “I am overloaded at the moment,” and directed questions to the proposed development’s website.

In 2020, when building owners were seeking a $1 million housing assistance grant for a plan to add 14 subsidized apartments, the aging structure was in need of repairs. At that time there were 82 apartments in the building. 

In 2022, the estimate to replace the roof was nearly $1 million and nearly $2 million to replace historical windows.

“Without access to a large amount of capital, we simply cannot afford these repairs on rental income alone,” the website states.

Renovations to buildings that, like Farwell Mill, are on the National Register of Historic Historic Places need to be completed at a standard that maintains the historical integrity and appearance.

The benefits of being on the register, which include low-income housing tax credits, federal historical tax credits, state historical tax credits, and a community development block grant, are not enough to cover the estimated restoration cost, according to the project’s website.

The developers said that by converting the mill’s subsidized apartments into market-rate units, they can raise the income needed for the renovations.

“Without Maine State Housing Authority covenants (on the low-income units) and with rent restrictions removed, we would have access to more funding sources necessary to rehabilitate the mill to historical standards,” the website states.

THE NEW DEVELOPMENT

According to MaineHousing Communications Director Scott Thistle, MaineHousing asked Realty Resources officials to provide new income-based housing for the mill tenants who will no longer have their apartments subsidized, so they will have “high-quality, well-maintained, safe, warm and affordable places to live.”

The proposed Winter Street housing development, roughly a half-mile drive from the mill, is proposed to be constructed in two phases. When complete Realty Resources officials plan to offer up to 70 subsidized apartments there, according to the website. As of Thursday, there was no project cost listed.

Forty-two units will be constructed in the first phase and 18-28 more in the second phase, the website says.

The project design proposes four buildings and a community building where there will be a mail room, laundry room and offices for property managers, a residential services coordinator and town personnel.

The developer is asking the town to donate or grant them an easement over abutting town land for a secondary emergency entrance, as required by town code, according to the project website.

It is also asking the town for special consideration to allow up to 70 units on the site.

“This is still in negotiation stages and would be subject to town council approval,” the project website says.

A 45-year affordability covenant is being proposed for the development so the buildings will remain low-income housing at least for the next few decades, according to the website.

Renters would need to meet low-income guidelines based on the area median household income specific to Lisbon, which is $77,819, according to the U.S. Census Bureau Quick Facts.

Three apartments would be restricted to those making 30% or less of the area median income, nine apartments would be restricted to those making 40% or less, and the rest would be restricted to those making 60% or less, according to the website.

Realty Resources officials hope to whittle away at the current waiting list for its subsidized units by building up to 70 units on the site, according to the website. There are 78 households waiting for a one-bedroom apartment, 25 waiting for a two-bedroom apartment, and 10 waiting for a three-bedroom apartment.

Renters in the 42 subsidized units at the former mill will be able to move into the new units on Winter Street after construction. Those who want to stay at the mill will have to pay a rent based on market rates, the developer said.

The project is in very early stages and Realty Resources is still in the process of securing the tax credits needed for the Winter Street project.

If the new development is approved, subsidized tenants in the mill apartments will not be asked to vacate their apartments until the new development is complete, Thistle said. The rent for tenants in the income-based apartments at the mill will not be subject to a market-rate increase during project construction.

The site plan application was filed with the town May 5, and plans will go to the planning board in June, according to Town Manager Sarah Bennett.